The Good Oil by Rod Brown*
Last month I attended the Competitiveness Institute conference in Glasgow – a gathering of economic development practitioners drawn from Councils, State development agencies, international agencies, telcos and IT companies.
The topic that permeated the dialogue was globalisation and converging market power – whether in the form of multinationals, supermarket chains or whatever. One of the common responses put forward was for small business to organise itself into networks or clusters to improve their market clout, purchasing leverage and general commercial dealings with larger organisations.
After Glasgow, I flew to Paris to wait for a Monday meeting with OECD officials. With a brain still spinning with concerns of where Australia sits in the global world, I nevertheless strolled up the Champs Elysees to see what my pathetic Aussie dollar might buy me. And there it was – Quiksilver – on the right as you head up the best known street in the world. Either side is Virgin Records, Charles Jordan, Club Med, Planet Hollywood.
So what? Well, in 1970 Quiksilver involved two surfers making surfboards in a garage in Torquay, 20 minutes drive south of Geelong. Folklore has it that Rip Curl, another major surfwear company, was a spin off after a disagreement.
A business grant from the Victorian Government gave them a kick start, and over time Quiksilver and Rip Curl made a name for themselves. Then Oakley sunglasses located there, as did numerous parts suppliers.
I walked into the Quiksilver store to check out the labels. On two levels were Quiksilver sweaters and shirts made in France and Macau, priced at around 389ff – 400ff (about $100), joggers made in Macau at 689ff ($170), wet suits made in Cap Breton at 1289ff ($320) and hundreds of other products with the Quiksilver brand. The goods seemed not overly expensive &endash; similar in price to what our kids would pay in Australia.
However, I still couldn’t see a connection to Australia. Although the store was reasonably full, one of the managers was keeping a quiet eye on me. He wandered over and I explained my interest.
Although his parents are Brazilian and French, he explained to me in perfect English that Quiksilver ‘sells a dream’ instead of using a strong Australian image. He provided me with a glossy brochure that indicated that the original owners &endash; Alan Green and John Law still live in Torquay and pull various corporate strings.
The ‘brainchild of the biggest and most successful international surfwear label on the planet’, today Alan is a happy man, and John is proud that his ‘passion for quality has paid off in a big way’.
Harry Hodge, formerly a surf photographer in Australia, set up the European operation in 1984. Harry is President of Quiksilver Europe, with headquarters in Saint Jean de Luz, near Biarritz on the French-Spanish border.
The fourth Australian is Bruce Raymond, formerly a top surfer. He began as a sponsored athlete. He is now MD of Quiksilver International and has been a key factor in the evolution and continued success of the brand.
There are two Americans &endash; Jeff Hakman was wearing Quiksilver board shorts in Hawaii in 1976, and convinced Alan Green and John Law to give him the licence to manufacture and sell Quiksilver products throughout the US. He is a co founder of Quiksilver Europe.
Bob McKnight became part of the family in the mid 1970s, taking a virtually unknown Australian clothing label to the American public and turning it into a cult brand.
They sponsor scores of surfers, such as Kelly Slater and Lisa Andersen, who have won ten world titles between them, as well as snow boarders around the world &endash; all part of the image and mystique. The bottom line is annual sales of $US600 million &endash; in other words a billion dollar company in Australia.
What are the lessons for Australian businesses? Perhaps a homily or two about going where your heart lies, and sticking with the knitting. But the real lesson is that they have succeeded by gathering expertise around them, taking a few risks, being that little bit different, and building supply chains into key world markets.
Quiksilver’s repatriated profits to the Australian owners are somehow feeding into Mr Costello’s National Accounts. Quiksilver is an outstanding example of how to cope with globalisation. Check them out next time you are in Paris &endash; or London, Rome, Amsterdam, Barcelona, Berlin and many other overseas outlets.
*Rod Brown’s Canberra based consultancy group, Australian Project Developments Pty Ltd, specialises in industry/regional development and government liaison.
For further information telephone (02) 6231 7261 or email apd@orac.net.au
